I think the really interesting story with Satoshi Dice is how it demonstrates a way to carry out incredibly low cost microtransactions using Bitcoin. Since they accept and pay out on unconfirmed transactions, they have put a lot of work into their secret sauce that prevents a variety of double spending and related attacks.

This is sort of stuff a digital download service, vending machine operator, or retailer ought to find thrilling. The bitcoin apps for Android are some of the most mature mobile payment apps out there that support NFC, and at least two servicable mobile web apps for iOS the only thing preventing Bitcoin from rivaling Square or Google Wallet in the mobile payments industry is point of sale hardware.

And that pesky little problem of getting people to, you know, actually want these things instead of regular currency.

No one in their sane mind sould trust online casinos. Games are based on pseudorandom number generator and algorithmns, and you rely on their honesty for fairness (alas there are only a few fair games as most have house advantage). They can introduce a 1% statistical bias for all you know, virtually undetectable but would mean tens of thousands extra profit for them.

True, but they need to keep a somewhat rational win ratio or their customers will go someplace else. If they are making good money with their current percentages, getting too greedy might just kill the goose of the golden eggs. I think it would be easier for them to forecast their financials by keeping things real and transparent than trying to experiment with statistical biases. Not to mention the PR nightmare (possibly leading to customers leaving in mass) it will generate if an entrepreneurial gambler somehow figures out what is going on. They are just starting a new business relying on relatively new technology and going through funding rounds. That being said, it's not like we should trust every online casino out there.

SatoshiDice is hammering the Bitcoin network by flooding it with transactions and is responsible for more than 50% of daily volume on the Bitcoin blockchain. It's this and the cap of 21 million unique coins in circulation that make me dubious of Bitcoins long term growth.

Sounds like you'd prefer a money system that didn't have volume and had no limit on the creation of coins?

You say "hammering the Bitcoin network by flooding it with transactions".... That's a really pessimistic way of saying "using Bitcoin tens of thousands of times a day to move money around for near-zero cost". The point of Bitcoin is to use it. SatoshiDice leverages this technology in an amazing way.

No one in their sane mind sould trust online casinos. Games are based on pseudorandom number generator and algorithmns, and you rely on their honesty for fairness (alas there are only a few fair games as most have house advantage). They can introduce a 1% statistical bias for all you know, virtually undetectable but would mean tens of thousands extra profit for them.

Actually if you knew what you were talking about, you'd know that SatoshiDice utilizes "provably fair" bets based on the Bitcoin blockchain technology. With some basic math, you can actually mathematically prove the bet was fair after you place it. It's pretty cool technology, and it makes the certification industry (and all the fraud and corruption therein) completely irrelevant.

I don't trust online casinos at all. It's far to easy to provide an illusion of fairness while rigging all the supposedly random outcomes. I need to see the physical dice. I need to see the cards get shuffled. Then there's also the fact that it can be incredibly hard to get your winnings from some online casinos. I used to run free poker tournaments in bars in college, and an online casino was having a promotion by handing out coupons for $10 at their online casino. A buddy of mine worked that up to like $60 playing poker then put it all on one roulette number and hit for about $2,000. The online casino refused to give him his money on the grounds that he had not put up 50% of the stake in real money. I'm not sure how the bitcoin based casinos work, but it probably solves the above payout issue. I still don't trust the game results to be even close to fair though.

No one in their sane mind sould trust online casinos. Games are based on pseudorandom number generator and algorithmns, and you rely on their honesty for fairness (alas there are only a few fair games as most have house advantage). They can introduce a 1% statistical bias for all you know, virtually undetectable but would mean tens of thousands extra profit for them.

Actually if you knew what you were talking about, you'd know that SatoshiDice utilizes "provably fair" bets based on the Bitcoin blockchain technology. With some basic math, you can actually mathematically prove the bet was fair after you place it. It's pretty cool technology, and it makes the certification industry (and all the fraud and corruption therein) completely irrelevant.

Really? Where did you read that? Could you post a link? I'm very interested in reading about this technology. Thanks!

Edit: never mind, it's on the website itself in the verification section.

Let's not forget there is no law on declaring taxes at all in this country.

[Citation Needed]

Google it. It is constitutional for the government to tax it's people, though there is no law mandating it directly. Now whether they're spending that money effectively is another story. Wouldn't mind being taxed for the good of this country, it isn't like this anymore, and I personally wouldn't want online innovations and evolutions to be involved or get handled dirtily by any government, corporation and upper power for their convenience and control over us law abiding citizens. Kind a like the whole "gun control" bs going on lately.

It will be interesting to see how US-based winners will represent their ฿ winnings/losses on their 1040, and if the IRS will recognize the ฿ to $ conversion...

Not only do they not have to because of the nature of bitcoin but it wouldn't be advisable since technically they're breaking the law by gambling online. I guess in theory the IRS could audit you and when they found out that you bought bitcoins (because of paypal and/or bank/credit card records) they could ask you why you bought them and what you did with them but it's not like they could do anything beyond that.

Even if they could threaten to punish you for not revealing what you did with your bitcoin balance you could just show them a wallet with the full amount (if you won and cashed out) or less and a good story (if you lost) about how you spent them on something legal but untraceable (software for example) and leave it at that.

Ah, no, you DO have to report it. Oh, sure it might be easier to hide, but you must report ALL earnings, even if they aren't in US dollars and even if they are not for legal activities.

Al Capone has not been the only person taken down in history because they didn't report illegal earnings to the IRS. It doesn't matter if it is selling pot, running a drug cartel or operating as a hit man. Any income must be reported to the IRS. Now, some incomes are easier to hide than others and some...well you'd probably be in a lot more trouble reporting them and their nature than hiding them, but it doesn't remove your legal obligation from reporting them.

Online gambling you could report the earnings as gambling income and likely no one would take a second look at exactly where the gambling was done. Then you'd stay above the board on income reporting requirements. Something tells me tax evasion is likely to result in a bigger civil and criminal penalty than participating in illegal online gambling.

Oh Bitcoins. I love you. Its funny to watch people try to explain BTC, when they really have no idea how it works. At the same time, I don't think there's anything that can quite compare to the level of in-depth 'theory-crafting, turned social experiment" that Bitcoins is, so the populous not comprehending the system is understandable. Its akin to asking someone to explain how the US Dollar and its economy works. Yea good luck with that. That would be an epic Leno "Jaywalking" segment.

I'm just happy and impressed its survived this long, gives future hope to releasing the world's economy from its ties to the strength of an individual country.

It will be interesting to see how US-based winners will represent their ฿ winnings/losses on their 1040, and if the IRS will recognize the ฿ to $ conversion...

Not only do they not have to because of the nature of bitcoin but it wouldn't be advisable since technically they're breaking the law by gambling online. I guess in theory the IRS could audit you and when they found out that you bought bitcoins (because of paypal and/or bank/credit card records) they could ask you why you bought them and what you did with them but it's not like they could do anything beyond that.

Even if they could threaten to punish you for not revealing what you did with your bitcoin balance you could just show them a wallet with the full amount (if you won and cashed out) or less and a good story (if you lost) about how you spent them on something legal but untraceable (software for example) and leave it at that.

Ah, no, you DO have to report it. Oh, sure it might be easier to hide, but you must report ALL earnings, even if they aren't in US dollars and even if they are not for legal activities.

Al Capone has not been the only person taken down in history because they didn't report illegal earnings to the IRS. It doesn't matter if it is selling pot, running a drug cartel or operating as a hit man. Any income must be reported to the IRS. Now, some incomes are easier to hide than others and some...well you'd probably be in a lot more trouble reporting them and their nature than hiding them, but it doesn't remove your legal obligation from reporting them.

Online gambling you could report the earnings as gambling income and likely no one would take a second look at exactly where the gambling was done. Then you'd stay above the board on income reporting requirements. Something tells me tax evasion is likely to result in a bigger civil and criminal penalty than participating in illegal online gambling.

I guess you could say a bunch of friends and you were betting on fantasy football or something and you won. 15 friends plus you in the fantasy league, $50 each, winner takes all, that's a $750 income (don't know if it is illegal to do this in the US but I would assume you can bet with your friends). Granted, if you happen to win several thousand then it becomes suspicious, but I doubt average gamblers can get to those figures in Satoshi Dice. If they can, they are gambling with serious money and probably have friends who can do that too, so maybe the justification stands?

I see a lot of informal Superbowl wagering pools floating around my office here in the San Francisco Bay Area, and I just know everyone who participates will certainly declare their losses/winnings on their tax returns next year.

Most of these pools are in US$, but the first one I see that takes bitcoins will be the one I jump on.

Even if these bitcoins casinos operate in an environment where online gambling is allowed, they still don't seem to be legal. Just about everywhere insists on gamblers being aged 18 or over, and the onus is on the site to ensure this.

SatoshiDice appears to make no checks to ensure that gamblers are of a legal age (in fact, they proclaim 'no account needed' as a feature. And Bitcoin is theoretically anonymous), so I can't see how the site can legally operate anywhere.

I think the really interesting story with Satoshi Dice is how it demonstrates a way to carry out incredibly low cost microtransactions using Bitcoin. Since they accept and pay out on unconfirmed transactions, they have put a lot of work into their secret sauce that prevents a variety of double spending and related attacks.

This is sort of stuff a digital download service, vending machine operator, or retailer ought to find thrilling. The bitcoin apps for Android are some of the most mature mobile payment apps out there that support NFC, and at least two servicable mobile web apps for iOS the only thing preventing Bitcoin from rivaling Square or Google Wallet in the mobile payments industry is point of sale hardware.

And that pesky little problem of getting people to, you know, actually want these things instead of regular currency.

I'd like some if it let we get a soda from a vending machine without having to deal with quarters. Because Bitcoins aren't dollars I think they would be perfect for small impulse purchases. People talk about bitcoin as a competitor to Western Union, but why not set them up to compete against giftcards except without the whole part where giftcards are tied to a particular retailer.

Someone correct me if I'm wrong, but can't you just delete someone's wallet file, and poof, there goes all their bitcoins? I couldn't imagine it ever becoming mainstream if catching a virus could mean losing all your money.

Someone correct me if I'm wrong, but can't you just delete someone's wallet file, and poof, there goes all their bitcoins? I couldn't imagine it ever becoming mainstream if catching a virus could mean losing all your money.

That's why you back up your wallet. This is Bitcoin 101. If you are really paranoid you could etch your private key into stone and store it in a bank vault.

No one in their sane mind sould trust online casinos. Games are based on pseudorandom number generator and algorithmns, and you rely on their honesty for fairness (alas there are only a few fair games as most have house advantage). They can introduce a 1% statistical bias for all you know, virtually undetectable but would mean tens of thousands extra profit for them.

True, but they need to keep a somewhat rational win ratio or their customers will go someplace else. If they are making good money with their current percentages, getting too greedy might just kill the goose of the golden eggs. I think it would be easier for them to forecast their financials by keeping things real and transparent than trying to experiment with statistical biases. Not to mention the PR nightmare (possibly leading to customers leaving in mass) it will generate if an entrepreneurial gambler somehow figures out what is going on. They are just starting a new business relying on relatively new technology and going through funding rounds. That being said, it's not like we should trust every online casino out there.

sean.orchard wrote:

Actually if you knew what you were talking about, you'd know that SatoshiDice utilizes "provably fair" bets based on the Bitcoin blockchain technology. With some basic math, you can actually mathematically prove the bet was fair after you place it. It's pretty cool technology, and it makes the certification industry (and all the fraud and corruption therein) completely irrelevant.

In statistics, you can't prove something is correct to absolute certainty, you can only say, within 95% confidience level, the game is unfair. To detect a 1% bias of the mean value with 95% cofidence level will probably require so many trials (I cannot work this out maybe someone can) it will probably be infeasible.

Someone correct me if I'm wrong, but can't you just delete someone's wallet file, and poof, there goes all their bitcoins? I couldn't imagine it ever becoming mainstream if catching a virus could mean losing all your money.

That's why you back up your wallet. This is Bitcoin 101. If you are really paranoid you could etch your private key into stone and store it in a bank vault.

Most people have a hard enough time backing up their pictures, let alone something as sensitive as their bitcoin wallets. As long as this is so, even if bitcoin somehow started gaining widespread use, it would grind to a halt as soon as viruses start deleting everyone's money.

So I can gamble with Bitcoins, buy drugs with Silk Road, and (using a payment processor that turns bitcoins into dollars) pay Wordpress. That's an overwhelming amount of options for a currency.

You forgot the primary option... sending money anywhere, at any time, to anyone, with no fee. You don't have to use it if you don't find it useful, Paypal loves your business.

Ok, that sounds really great. So why don't I hear stories about that? Also, you're sending bitcoins to people, but people can't use bitcoins to pay for the majority of things so you'd have to cash out. Cashing out has a fee right? Mt Gox, Dwolla, whatever service you're using for bitcoins to cash, cash to bitcoins, they're not doing that for free.

So bitcoins offers a cheaper way to send money, with more hurdles though not necessarily difficult ones?

So I can gamble with Bitcoins, buy drugs with Silk Road, and (using a payment processor that turns bitcoins into dollars) pay Wordpress. That's an overwhelming amount of options for a currency.

You forgot the primary option... sending money anywhere, at any time, to anyone, with no fee. You don't have to use it if you don't find it useful, Paypal loves your business.

Ok, that sounds really great. So why don't I hear stories about that? Also, you're sending bitcoins to people, but people can't use bitcoins to pay for the majority of things so you'd have to cash out. Cashing out has a fee right? Mt Gox, Dwolla, whatever service you're using for bitcoins to cash, cash to bitcoins, they're not doing that for free.

So bitcoins offers a cheaper way to send money, with more hurdles though not necessarily difficult ones?

As the bitcoin economy matures, there should be less and less need to convert BTC to EUR, USD, GBP or other currencies because bitcoins, by their design, should evenutally become the preferred medium of exchange for e-commerce. More and more web hosting services and VPN providers are accepting bitcoins for payment, and the bitcoin wiki has a huge listing of more than 400 online businesses that take bitcoins. Sure, until more brick and mortar businesses adopt the new currency, you'll still need to use physical currency minted by a government to shop at these stores, but merchant tools to ease the transition to bitcoins are rapidly developing into useful products. Lots of people have found how easy it is to pay for things by using their smartphone (with things like Square and Intuit's GoPay), and the bitcoin apps for Android are going to make this even faster and cheaper.

A currency based on proof of CPU work is mainly suited to criminals, due to the fact that criminals by definition don't pay the electricity used on the botnets used to 'mine' bitcoins. Honest people have no reason to accept money minted on the basis that the prover of work has probably stolen the resources used to do this. However, this objection doesn't apply to the objective of establishing temporary trust between crooks when violence is unavailable to enforce contracts. There is no such thing as long-term trust between crooks.

It's therefore not a great surprise that a high proportion of the products offered in exchange for BC are the ability to gamble online, or the supply of illegal drugs.

Recently I played some roulette on satoshibet (https://satoshibet.com/roulette)The ease of use compared to a real fiat casino is enormous, it's completely anonymous, the money arrives instantly, and the site doesn't require me to download any software. I see a very bright future for bitcoin casinos.

Recently I played some roulette on satoshibet (https://satoshibet.com/roulette)The ease of use compared to a real fiat casino is enormous, it's completely anonymous, the money arrives instantly, and the site doesn't require me to download any software. I see a very bright future for bitcoin casinos.

Pretty amazing. Noit a gmabler or anything but did try online poker and I simply couldn't do anything that enabled me to maintiain my personal dignity. The amount of information to give is ridiculous, now becoming such a norm that newest generation of kids will find it normal to give out anything to their dear uppers. Rant aside, The fact that I can sit at a table on some saloon and start gambling with revolver, is the equivalent of bitcoining on the internet whenever I like, anytime I like without BS, when the US once was.